S&P Global lowers US economic growth outlook for 2023, 2024

S&P Global Market Intelligence Agency has lowered its outlook for the US real economic growth for 2023 by 20 basis points, or 1.2 percent, and by 90 bps, or 0.9 percent for 2024 on Tuesday.

The downgrade in S&P’s outlook comes after risks concerning the country’s debt ceiling and credit standards tightening.

Fears of the US possibly failing to meet its financial obligations by early June has prompted Joel Prakken, co-head of US Economics at S&P Global Market Intelligence, to slightly downgrade the mid-year drop in stock prices that contribute to a slower growth for this year and 2024.

The US Gross Domestic Product (GDP) could be impacted by the credit standards tightening, compared to last month, because of the possible deterioration in the quality commercial real estate loans, which lead to a drop in investment in nonresidential structures.

The recent S&P outlook came before President Joe Biden’s awaited meeting with major Republican legislators on Tuesday to discuss raising the US debt ceiling that reached $31.4 trillion, in which was finalized with Republicans not agreeing to the decision.